"While many in the industry have had to change course, we remain on track to deliver our main objectives," said Nostrum Oil & Gas (NOG) chairman Frank Monstrey in his summary of 2016. His company, he added, "has not wavered during one of the most challenging years for the oil and gas industry in over a decade".
This is largely true, even if the most important objective - to double production with the construction of the giant GTU3 gas plant - was originally meant to have been reflected in 2016's results; this is now set to happen in the second half of 2017.
None of this is to suggest that the company's promises for GTU3 have lived up to the original English meaning of 'nostrum' - a remedy sold on exaggerated claims - merely that priorities have had to shift. For one, the focus on costs has intensified, reflected in the year-on-year double-digit drop in operating and transport costs to $3.7 and $5.1 per barrel respectively. Second, a strained balance sheet has forced the high grading of near-term production, achieved through the addition of three wells in 2016.
Analysts at Numis expect pre-tax profit of $61.7m and EPS of 18¢ in 2017, against losses of $52.4m and 33¢ a share in 2016.
NOSTRUM OIL & GAS (NOG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 455p | MARKET VALUE: | £841m | |
| TOUCH: | 455-456p | 12-MONTH HIGH: | 525p | LOW: 203p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 374¢ | NET DEBT: | 124% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 737 | 282 | 87.0 | 34 † |
| 2013 | 895 | 362 | 118 | 35 † |
| 2014 | 782 | 312 | 79.0 | 27 † |
| 2015 | 449 | 72.3 | -51.0 | nil |
| 2016 | 348 | -64.5 | -44.0 | nil |
| % change | -22 | - | - | - |
Ex-div: - Payment: - £1=$1.24 | ||||
